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NEW YORK -- Six major oil companies have agreed to pay a total $21.6 million to settle "hot fuel" lawsuits. The proposed settlement, which was filed in U.S. District Court in Kansas on June 15, brings to light the financial details of the deal that comes five years after the legal proceedings began.
According to a Reuters, ConocoPhillips, ExxonMobil, Shell Oil Products US and two subsidiaries of BP PLC -- BP Products North America Inc. and BP West Coast Products LLC -- will pay $5 million each, according to court documents. CITGO Petroleum Corp. and Sinclair Oil Corp. will shell out $800,000 each.
The funds will be distributed among retailers and wholesalers in the 29 U.S. states and territories where the hot fuel suits were filed, the report added. Valero Energy Corp. will not pay into the general settlement fund, but will provide up to $4.5 million in attorney's fees, according to court papers.
CSNews Online reported in April that a settlement deal was on the table. At that time, BP Products North America, along with ConocoPhillips and Shell Oil Products US reached a binding agreement with the plaintiffs in the lawsuits dating back to 2007.
The issue behind hot fuel refers to when diesel and gasoline is sold warmer than the standard 60 degrees. While fuel temperature is compensated for at all points of the refining and wholesale fuel process, it is not at the retail pump. When fuel is warmer than the standard, it expands, giving consumers less energy for the price.